Hint_on_problem_27

Hint_on_problem_27 - 15*12 = 180 15*10 = 150 Profit =...

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A few of you have asked on how to construct the pay off table for problem # 27. This is how we go about doing it. We need to use all the information. Create a column and call it supply. Create a row and call it demand. The values for demand and supply are the same; 15, 16, 17, and 18. Now you have a matrix 4 by 4 that you need to fill. Demand Stock 15 16 17 18 Milk cases .20 .25 .40 .15 15 $30 $26 $22 $18 16 22 32 28 24 17 14 24 34 30 18 6 16 26 36 First when demand = supply, the cell will have these values for 15 it is 30, for 16 it is 32, for 17 it is 34 and for 18 it is 36. I just show you how I got the number for 18. You can do the rest. Demand = 18*12 = 216 Supply = 18*10 = 180 Profit = 216-180 = 36 To fill out the other cells for example when demand = 15, but supply is equal to 16
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Unformatted text preview: 15*12 = 180 15*10 = 150 Profit = 180-150 For each shortage, the cost is 4$ So at demand = 16, supply equal 15, we have 30-4 = 26 At D = 17 and S = 15, the number should become 26-4 = 22, etc. We can use the same logic to produce the other cells. This is for filling the cells to the right of diameter of the matrix. For numbers to the left of the diameter of matrix, for example when D = 17, and S = 18 17*12 = 204 18*10 = 180 Profit = 204-180 = 24 But the salvage for unsold case is 2$ So 24+ 2 = 26 You have to continue this reasoning to complete the pay off matrix. Hope this helps....
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This note was uploaded on 06/17/2010 for the course MAT 540 taught by Professor Azad during the Spring '10 term at Strayer.

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Hint_on_problem_27 - 15*12 = 180 15*10 = 150 Profit =...

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